Recently we were conducting an outsourced internal audit, looking at the risk associated with a third-party on behalf of our client. (Their vendor risk management program requires due diligence in the use of a third-party to process “sensitive” data on their behalf). On review, we found that the third-party data analytics/SaaS vendor we were assessing likewise outsourced a significant part of its IT operations (e.g., data hosting system and database administration, security monitoring). Assessing a third-party’s third-party risk; that is, “sixth-party risk,” is an interesting and growing challenge.
So is it your obligation when assessing a third-party to assess their third-party relationships? Needless to say, this could grow even more challenging as a third-party might employ a multitude of third parties, some of whom may also employ third parties. Assessing all these entities is both impractical and arguably not necessary.
The approach Pivot Point Security took on behalf of our client was to assess the third-party, including the controls that they need to have in place to manage their third parties. There are a couple of primary controls in the ISO 27002 control set intended to address third-party risk:
- A.6.2 External Party Security -
- Identification of Risks Related to External Parties
- Addressing Security When Dealing with Vendors/Customers/Partners
- Addressing Security in Third Party Agreements
- A.10.2 Third Party Service Delivery Management -
- Service Delivery Control
- Monitoring & Review of Third Party Services
- Managing Changes to Third Party Services
So managing sixth-party risk is not about managing sixth-party risk directly – rather it’s about managing risk indirectly by ensuring that your third-party is managing its third-party risk.
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About the Author:
John Verry, CISA, 27001 Certified Lead Auditor, CCSE, CRISC - "Security Sherpa" - Information Security Auditor